News, Views and People from the Russell Ulyatt Group

OBR forecasts present need for tax increases in the Budget
August 2018

The long-term outlook for government finances suggests tax increases are inevitable.

The Office for Budget Responsibility (OBR) produces medium-term financial forecasts alongside the Budget and Spring Statement, but that is not its only task.  It is also required to take a longer-term view of the public finances, producing a Fiscal Sustainability Report every two years.

The latest version of the report was published in mid-July and did not make for comforting reading.  The graph is a good summary of the bad news:

  • The purple lines show the projected government borrowing as a percentage of the size of the UK economy.  In 2017/18 annual borrowing was 1.9% of Gross Domestic Product (GDP). By 2067/68 it becomes 85.6%.
  • The green line shows the total amount of government debt, also as a proportion of the UK economy.  As at May 2018, total borrowing was 85.0% of Gross Domestic Product (GDP). By 2067/68 it becomes 282.8%.

In the report, the OBR says, “Needless to say, in practice policy would need to change long before [2067/68] to prevent this outcome.”  That means reduced expenditure and/or increased taxation.

Reductions in expenditure are unlikely, as much of the rise is driven by the costs of caring for an ageing population.  In the short term, increasing taxes is also hard to imagine given the current political climate.  In the longer term, tax rises appear unavoidable based on the OBR’s calculations.  The first indications of what form tax rises might take could emerge when the Chancellor gives his response to the OBR in the Autumn Budget.

If you are looking for any solace, it is best sought in mathematics: these types of long-term projections are highly sensitive to relatively small changes in the underlying assumptions.  If the UK economy were to grow faster than the 2.2% the OBR has assumed, the situation improves significantly.  Alas, the opposite is also true.

With the UK’s growth rates remaining low, however, it seems likely the government will need to take some kind of action soon.

  • The value of tax reliefs depends on your individual circumstances.
  • Tax laws can change.
  • The Financial Conduct Authority does not regulate tax advice.


2018 proves volatile after the smooth sailing of 2017
August 2018

The first six months of 2018 were unpredictable times for investors as global stock markets suffered a sudden bout of volatility.

Source: LSE

The unpredictability came as a major surprise after the general stability of 2017.  Once the dust had settled there was a mixture of good and bad news.

The UK markets were inevitably led by Brexit, with negotiations mainly at the intra- rather than inter-government level.  The other perennial British topic, the weather, produced the Beast from the East, depressing economic activity in the first quarter.

US short term interest rates continued to rise under the new chairperson of the Federal Reserve, with more increases promised for the second half of the year.  Meanwhile, the tension between America and North Korea turned into a denuclearisation agreement and the Trump tax cuts were followed by the start of Trump trade wars, hitting long-term allies as well as the supposed target of China.

For all that, an investor who opened their first newspaper of the year on 1 July 2018 would have thought nothing much had happened.  The FTSE 100 index fell by less than 1% in the first six months of 2018.  Across the Atlantic, the S&P 500 rose in the same period, but only by 1.7%.

The small overall changes are a reminder that daily market movements often turn out to be self-cancelling noise, best ignored by the long-term investor.

  • The value of your investment can go down as well as up and you may not get back the full amount you invested.
  • Past performance is not a reliable indicator of future performance.
  • Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

The Chancellor’s first Spring Statement
March 2018

Mr Hammond made clear some while ago that he wanted his Spring Statement to be a short financial briefing rather than a mini-Budget, complete with rabbit-out-of-hat announcements.

Although his speech ran to 25 minutes, rather than the 15-20 that had been promised, the Chancellor stuck to a no-frills script.

Click here to view our Spring Statement Summary

There were no new tax measures and no spending changes.  The Office for Budget Responsibility (OBR) trimmed its projections for government borrowing, but Mr Hammond simply banked the savings for his Autumn Budget.  Spending will be subject to a detailed review in 2019.

While the Chancellor appeared to say little, his statement was followed by the publication of a range of documents covering areas including:

  • English business rates – The next revaluation of business property in England will be brought forward one year to 2021, with three-yearly revaluations thereafter.
  • Entrepreneur’s relief – A consultation paper was published on how to give entrepreneurs’ relief in circumstances where it would otherwise be lost because of a new share issue.
  • VAT threshold – The government issued a call for evidence on restructuring the VAT registration threshold to offer more incentives for small businesses to grow.  There is some evidence that businesses deliberately limit growth to avoid crossing the existing £85,000 threshold (which has been frozen for the next two years).
  • Tax and the digital economy – There were several papers examining taxation issues surrounding the digital economy, including VAT and income tax leakage through internet trading platforms.
  • Self-funded work-related training – A consultation paper was published examining how to extend the existing tax relief framework to self-funded work-related training by employees and the self-employed.

Many of these documents will eventually result in legislation, but that doesn’t mean no tax changes in the interim.  The impact of last November’s Budget (and some earlier measures) will soon be felt with the start of the new tax year.

Please get in touch with us if you’d like to discuss any aspects of the Spring Statement and how they might affect you.

Tax Tables 2018/19
March 2018

Click here to view our tax tables for the 2018/19 tax year, updated with announcements made in the Spring Statement on 13th March.  We hope you will find them useful and interesting.

Please get in touch if you would like a discussion with us about your tax or general financial situation.

RU freezing?
March 2018

Despite the snowy conditions and temparatures of minus 5, it’s business as usual today at The RU Group.

Our dedicated team battled the elements to make it into the office today and even braved the icy weather for a team photo – and a snowball fight!

A big thank you to everyone.


Nick Onslow scoops prestigious industry award
February 2018

We are very pleased to announce that our very own Nick Onslow won the High Achiever Award at the Nottingham Chartered Insurance Institute’s gala dinner on 19th January 2018.

Nick Onslow (centre) receiving the High Achiever Award

The outstanding ‘Culture of Learning’ spearheaded by Nick, coupled with an array of his other professional achievements was recognised by the Nottingham Insurance Institute.

The High Achiever Award is a highly prestigious prize awarded to the local general insurance or financial services professional who has demonstrated the highest levels of attitude, performance and achievement in their working life.

Nick’s vision led Russell Ulyatt to achieve Chartered status in 2016 and its renewal in 2017.  This is tribute to Nick’s capacity to embed a ‘Culture of Learning’ into our company, further demonstrating our continued commitment to raising the expertise, knowledge and professionalism of our staff.

Following rigorous scrutiny by an esteemed panel of industry experts, Nick’s considerable and wide-ranging achievements have received much deserved recognition.  Here at Russell Ulyatt, Nick is known for his ambition, determination, commitment and enthusiasm.  This led to his nomination for the award by Ian Browne, Head of Advice, along with a recent promotion to our Senior Leadership Team.

Nick’s primary role is a Chartered Financial Planner providing exceptional service to the 120 clients he looks after.  In addition to this, his skills as a financial planner and human resources expert have led to him being a sought-after contributor on financial matters to national newspapers.  He also recently appeared on Notts TV offering advice on saving for Christmas and dealing with financial pressures when the festivities are over.

But it’s Nick’s innovative, transformative strategies within our company that, according to Ian Browne, really makes Nick’s credentials stand out.  Ian commented,

“Nick has been the sole architect of our ‘Culture of Learning,’ transforming the level of knowledge within the business with an emphasis on growth through professional development.  Recognising that the more knowledge our staff have, the better the outcomes for clients, Nick’s passion for individuals enhancing their own professional qualifications, mentoring schemes, and the provision of regular training events by Russell Ulyatt has created a real buzz around the office and ongoing learning is now the company norm.”

Not surprisingly, Nick is seen as the “go to” person in the company for young advisers and paraplanners and he also takes a role in training apprentices.  He gives generously of his time to read their advice reports and offer guidance, helping them to deliver great client outcomes.  His approach to recruit the best staff and invest in their careers plays an increasingly important role in staff retention and morale.  Nick said,

“I am very honoured and delighted to receive the High Achiever of the Year Award.  I appreciate the very kind comments made by Ian Browne in his nomination but feel that the award is testament to the aspirational ethos at Russell Ulyatt and great teamwork, which made my achievements possible.  So really, I’m accepting the award on behalf of the company.  We can all reflect on and celebrate this success and use it to motivate us as we move forward with our plans to meet the Chartered Insurance Institutes Higher Standards in 2020.”

I feel gratified that my colleagues show such a genuine commitment to their continued professional growth.  Their dedication to self-improvement helps them develop confidence and expertise.  Their success is great for morale and, of course, our clients benefit from this ethos.  Our investment in people is certainly paying dividends.  We recently had 30 exam passes from 22 members of the team.  This illustrates just how hard they are working.

Congratulations Nick.  A fantastic achievement.